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University of the Philippines Manila College of Arts and Sciences Padre Faura, Manila University of the Philippines Manila College of Arts and Sciences Padre Faura, Manila Socio-economic Impacts of PPP on Transportation Infrastructure Development: The case of PUJ Drivers and Commuters in South Luzon Expressway An Undergraduate Thesis Presented to the Deparment of Social Sciences College of Arts and Sciences University of the Philippines Manila In Partial Fulfillment of the Requirements For the Degree of Bachelor of Arts Major in Development Studies Dr. Edberto M. Villegas Thesis Adviser Presented by Arlene I. Magtalas 2008-18679 March 2012 APPROVAL SHEET In partial fulfillment of the course requirements for the degree of Bachelor of Arts Major in Development Studies, this undergraduate thesis, entitled, “ Socio-economic Impacts of PPP on Transportation Infrastructure Development: The case of PUJ Drivers and Commuters in South Luzon Expressway ”, prepared and submitted by Arlene I. Magtalas, is hereby recommended for approval ___________________________ Dr. Edberto M. Villegas Thesis Adviser Department of Social Sciences ___________________________ Date signed This thesis is hereby accepted and approved as partial fulfillment of the requirements for the degree of Bachelor of Arts in Development Studies. ___________________________ Prof. Carl Marc Ramota Chairperson Department of Social Sciences ___________________________ Date signed i ACKNOWLEDGEMENT This thesis would not have been possible without the help of several individuals, institutions and organizations who contributed and extended their valuable assistance in the preparation and completion of this study. I would like to express my sincerest gratitude to ... First and foremost, I offer my utmost gratitude to my parents, Larry Magtalas and Nenita Magtalas who never failed to provide financial and moral support. As well as to my siblings, Aldrine, Jaja and Lyrra; niece, Ritz; and nephew, Gian, who never failed to inspire me. They are the ones that keep me going. To my Thesis Adviser, Doc Edberto Villegas, for the supervision, advice and guidance you have extended to me while doing this thesis and even before. It is an honor to be mentored by you. Thank you very much for the friendship. To Mr. Jose Enrique ‘Sonny’ Africa, Executive Director of IBON Foundation and the staff of IBON Foundation, for accommodating me in your office and providing necessary materials relevant to this study. To Mr. Steve Ranjo, Secretary-General of Pagkakaisa ng mga Samahan ng Tsuper at Operators Nationwide (PISTON), who accommodated me in their headquarters and provided me the necessary background information for this study. To Atty. Edmundo Reyes, Executive Director of the Toll Regulatory Board, Mr. Julius Corpuz, TRB Spokesperson and Mr. John Patrick Ojano, for welcoming me in your office and for sharing your time and knowledge. ii To Dr. Gilbert Llanto, Senior Research Fellow at the Philippines Institute for Development Studies (PIDS), for your valuable knowledge. To HM Transport, for allowing me to conduct my survey on bus passengers in your terminal in Cubao. To all my respondents, especially the jeepney drivers in Alabang, for answering my survey, providing necessary information and sharing your thoughts. Thank you for making this thesis possible. To my professors, Sir Ponsaran, Sir Simbulan, Sir Mesina and Ma’am Legaspi, for the lessons about political economy and life, for teaching me to always look beyond the surface and for making my UP experience socially-relevant. I am proud to be your student. To Block 5, for accepting me in the block. To my thesis-mates, for the stories we have talked about while waiting for our turn during our consultation with Doc Ed in DSS. To my dorm-friends, Lyrra, Mars, Cha, Trixia, Tin, Joy, Ayen, Anchin, Mia, Jen, Badet and the entire third floor, for the support and for putting up with me during that fateful week before the deadline. To my super friends, Ariza, Rayla, Hann, Reggie, Pipoy and to JV, for always being there, for the memories, for keeping me sane and for pressuring me to do my thesis. Special thanks to Ariza and Rayla for accompanying me during some of the interviews and to JV, for accompanying me during data gathering. iii And lastly, to our All Mighty God, for the guidance, support and blessings You have given us every single day of our lives. iv ABSTRACT This study was conducted to assess the socio-economic impacts of public-private partnership on transportation infrastructure development on commuters and PUJ drivers in South Luzon Expressway. This research aimed to know whether PPP has truly promoted the interest of the public and to evaluate the PPP strategy of the government in providing transportation infrastructure using the perspective of the people to whom it is intended for. To gather the needed data, survey questionnaire was used. The survey included 60 commuters and 30 jeepney drivers. The researcher initially studied and analyzed the socio- economic characteristics of the respondents before the implementation of the toll hike and then compared it to their current situation. The results showed that PPP in SLEx only worsen the socio-economic situation of those who regularly pass the said tollway, especially the jeepney drivers. The burden of the toll falls on the jeepney drivers because an increase in toll does not necessarily translate to an increase in fare. The commuters, on the other hand, are not directly affected. The results also showed that though SLEx physically improved, the respondents believe that these improvements are not worth the increase in toll. The data gathered proved that PPP failed miserably to deliver its promises of improved services, increased efficiency and lower costs. The researcher believes that the vicous cycle of corporate takeover of the government, debt and onerous user fees, created by PPP, must be stopped from further oppressing the people. v TABLE OF CONTENTS CHAPTER TITLE PAGE Title Page Approval Sheet i Acknowledgement ii Abstract v Table of Contents vi Chapter I: Thesis Proposal Statement of the Problem 2 Definition of Terms 4 Theoretical Framework 5 Methodology 6 Hypotheses 8 Review of Related Literature 8 Scope and Limitation 17 Significance of the Study 17 Chapter II: Background of the Study Public-Private Partnership 20 Schemes for Private Sector Participation in Infrastructure Development 26 The South Luzon Expressway (SLEx) 29 The Toll Regulatory Board 38 Chapter III: Presentation and Analysis of Data Profile of Respondents 43 Socio-economic Indicators 48 Respondents’ Insight on the Toll Hike And Slex 54 Respondents’ Insight on PPP and Government Responsibility 57 Chapter IV: Conclussion and Recommendations Conclusion 61 Recommendations 67 Bibliography 69 Appendices 72 vi CHAPTER I THESIS PROPOSAL 1 Statement of the Problem Transportation is a public good. It is of utmost importance that people have access to it. It is a part of every person’s daily life. Transportation has sociological, political and economic relevance active political and social participation requires physical mobility; and the transfer of goods and services, would be hard without reliable transportation infrastructure. Transportation cost affects the price of goods and services. Furthermore, difficulty in transporting goods and services discourages economic activities and thus, hinders growth. In the case of the Philippines, an increase in transportation cost is almost unbearable for the regular workers and the minimum wage earners since their wage remains stagnant. Hence, having transportation infrastructure that is accessible, reliable and affordable is very important. It is the responsibilty of the government to provide roads and mass rail transits to its people. But, according to President Benigno Aquino III, the government lacks funds to develop public infrastructure. Hence, to answer this problem, his administration would resort to public-private partnerships. According to him, PPP will help solve the country’s severe lack of infrastructure in the midst of the tight fiscal situation that the government is facing. Public-private partnership, in E.S. Savas’ “ Privatization and Public-Private Partnership ”(1999), is defined as a form of privatization included in the ‘delegation strategy’. This means that ‘the government retains responsibility and oversight but uses the private sector for service delivery, for example, by contracting for services, or outsourcing’. Six tollway systems in the Philippines, the North Luzon Expressway (NLEx), South Luzon Expressway (SLEx), the Subic-Clark-Tarlac Expressway (SCTEx), Manila-Cavite 2 Expressway (Coastal Road), South Metro Manila Skyway (Skyway), and the Southern Tagalog Arterial Way (Star Tollway), are under PPP arrangements. In the early part of 2011, NLEx raised its rates while SLEx imposed a 300% toll fee hike. Rail transits are also built under PPP. Now, commuters are facing the possibility of an increase in rail transit fees. Public-private partnership provided us with improved roads and other transportation infrastructure. But did it solve the problems of the transportation sector? Did it improve the lives of Filipinos? Did it contribute to development? To answer the aforementioned questions, the researcher chose this topic. The researcher aims to identify the socio-economic implications of PPP in transportation infrastructure development. The research seeks to know whether PPP has truly promoted the interest of the public. It aims to evaluate the PPP strategy of the government in providing transportation infrastructure using the perspective
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